Former Ontario Premiere Dalton McGuinty laughs with Ontario Premier Kathleen Wynne before McGuinty's official portrait is unveiled at Queen's Park, in Toronto, Tuesday February 23, 2016.THE CANADIAN PRESS/Mark Blinch

To hear Premier Kathleen Wynne tell it, Ontario taxpayers can have all sorts of free or inexpensive election goodies — daycare, prescription drugs, college and university tuition, lower electricity rates — simply by putting it all on the taxpayers’ dime.

Because that’s what reckless government spending and runaway deficits and debt do.

Irresponsibly driving up public debt — as opposed to using it strategically to pay for needed infrastructure such as highways and public transit in the same way you take out a mortgage to buy a house — doesn’t just fob off today’s bills to our children and grandchildren.

The Liberals’ record deluge of red ink has already significantly damaged Ontario’s economy.

It’s also the reason for broken Liberal election promises in the past, just as I believe Wynne will break many of the promises she’s making today if she wins on June 7.

Since the best indicator of future performance is past practice, consider what the Liberals did at the very start of their regime 15 years ago.

After Wynne’s predecessor, Dalton McGuinty, won power in 2003, he broke his signature election promise not to raise taxes, imposing a multi-billion-dollar annual tax hike on Ontario families that continues to this day.

Premier Dalton McGuinty listens as the throne speech is read in the Ontario legislature in 2005.Sun files

McGuinty said he had to do it to save the health care system, because the previous Progressive Conservative government had left the province’s books in terrible financial shape.

When McGuinty made that excuse for breaking his promise and dramatically raising taxes, Ontario’s public debt was $138.8 billion.

The debt expressed as a percentage of the provincial economy (debt-to-GDP-ratio) was 27.2%.

And taxpayers were paying $9.6 billion annually in interest on debt.

Today, after 15 years of Liberal rule, under McGuinty and now Wynne, Ontario’s public debt is projected at $325 billion this year, a 134% increase since 2003 — far outstripping population, inflation and economic growth.

Ontario Premier Kathleen Wynne. (THE CANADIAN PRESS)Frank Gunn /
THE CANADIAN PRESS

If paying interest on debt, which doesn’t reduce the debt by a penny, was a government department, it would be the fourth-largest, after health, education and social services.

The Wynne government keeps promising to gradually reduce Ontario’s debt-to-GDP ratio to the pre-recession level it inherited from the PCs.

But the Legislature’s Financial Accountability Office, an independent, non-partisan fiscal watchdog, says it has failed to provide a credible plan to do it.

In their 16 annual budgets since coming to power in 2003, the Liberals have run four surpluses and 12 deficits.

Their average surplus was $1 billion and that’s conceding Wynne’s argument her government had a $642 million surplus in 2017-2018.

Both the Auditor General and Financial Accountability Office say this was achieved through accounting tricks and there is actually a $4 billion to $4.5 billion deficit in 2017-18.

Auditor General Bonnie LysykCriag Robertson/Toronto Sun

The average annual deficit of the 12 officially recorded by the Liberals since 2003 is $8.6 billion, including a projected one for this fiscal year (2018-19) of $6.7 billion.

In her March 27 budget, Wynne, in order to pay for her election promises, predicted five more years of deficits if she is re-elected — $6.6 billion in 2019-20; $6.5 billion in 2020-21; $5.6 billion in 2021-22; $4 billion in 2022-23 and $2.5 billion in 2023-24 — before the Liberals say they will again balance the budget in 2024-25.

By then, under Wynne’s plan, Ontario’s public debt will be $400 billion.

A year ago, Wynne said she would balance the budget for three consecutive years, a pledge she has now replaced with six consecutive deficits to pay for her election promises.

In response, Moody’s Investors Service, while it did not lower the province’s credit rating last week, changed its financial outlook for the Ontario government from “stable” to “negative”.

To be fair, government revenues all over the world were severely impacted by the 2008 global recession and its aftermath, leading to higher deficits and debt.

But as the Fraser Institute, a fiscally conservative think tank, noted in 2016, “the primary reason for Ontario’s persistent deficits is spending growth over the past decade, which has significantly outstripped key economic metrics.

“Between 2003-04 and 2015-16, provincial program spending increased by 71.6%, from $70.4 billion to $120.9 billion. On average, program spending increased by 4.7% annually during this period, greatly surpassing the average annual rate of inflation plus population growth (2.8%) and of economic growth (3.2%) in the province.”

Had the Liberals restrained program spending growth to the rate of the province’s economic growth from 2003-04 to 2015-16, they would have had a $10.7 billion surplus instead of a $3.5 billion deficit in 2015-16, and would have run one deficit over the previous 13 years, instead of 10.

The Wynne Liberals defend their rapid hiking of provincial debt in part by citing their $190-billion, 13-year, public infrastructure plan, started in 2014-15.

But as Sun columnist Ben Eisen, director of the Fraser Institute’s Ontario Prosperity Initiative, noted last week, $93 billion of the $168 billion the Liberals have added to the provincial debt since 2007-08, or 55%, went toward day-to-day operating expenses, such as paying for public sector salaries, not public infrastructure.

Ontario’s debt has kept growing even in the rare years where the Liberals have balanced the budget, because the operating budget only includes current expenses, not the cost of capital improvements.

Premier Kathleen Wynne defends her government in the legislature regarding the Ontario auditor general special report on the Fair Hydro Plan on Oct. 17, 2017.Craig Robertson /
Toronto Sun

Runaway deficits and debt don’t just impact future generations who will be stuck with the bills Wynne is racking up now.

They’ve also hurt today’s taxpayers.

While the Liberals point to Ontario’s booming economy last year as proof their policies are working, in the decade from 2007 to 2016, those numbers were dismal.

During that time, Ontario finished seventh out of the 10 Canadian provinces in average annual GDP growth at 0.4%, compared to 0.6% for the rest of Canada; eighth in private sector job growth at 0.6% annually compared to almost double that at 1.1% for the rest of Canada; ninth in accumulated debt per person, adding $9,313 compared to $5,770 for Canadians in other provinces and tenth in median household income growth of just 3.8%, compared to 15.7% for the rest of Canada from 2005 to 2015, the last year for which figures are available.

Eisen calls it Ontario’s “lost decade” and says it will take years to recover the province’s historic status as the economic engine of Canada.

Because the Liberals have driven up the debt in a time of historically low interest rates, a rate spike would dramatically increase the government’s cost of servicing its debt.

By failing to rein in spending and debt in what they say is now a booming Ontario economy, the Wynne Liberals have left their government — one of the world’s most indebted sub-sovereign (non-national) borrowers — with little financial room to respond to the next recession, when it inevitably comes.

Ontario PC Leader Doug Ford takes questions from journalists during a pre-budget lock-up as the Ontario Provincial Government prepares to deliver its 2018 Budget at the Queens Park Legislature in Toronto on Wednesday, March 28, 2018.Chris Young /
THE CANADIAN PRESS

Even if the Progressive Conservatives under Doug Ford, or the NDP under Andrea Horwath, win the June 7 election, no political party will be able to eliminate Ontario’s chronic deficits and runaway debt immediately, assuming they want to, because of the enormous economic damage the Liberals have already caused.

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